John Contributes Land Having $110,000 FMV and a $90,000 Adjusted

question 7

Multiple Choice

John contributes land having $110,000 FMV and a $90,000 adjusted basis which is subject to a $60,000 mortgage in exchange for a one-third interest in the AJK Partnership.The partnership owes no other liabilities.After the contribution,Abby,John,and Kent share profits and losses equally and each has a one-third interest in the partnership capital.John's basis in the partnership interest is

• A)$50,000.
• B)$90,000.
• C)$110,000.
• D)$150,000.

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Definitions:

Isotope

Variants of an element that contain the same number of protons but different numbers of neutrons in their nuclei.

Neutrons

Subatomic particles, found in the nucleus of an atom, that have no electrical charge and a mass slightly larger than that of protons.

Element

A substance that cannot be broken down into simpler substances by chemical means and is made up of atoms all with the same number of protons.

Isotope

Variants of a particular chemical element which differ in neutron number, and consequently in mass, but not in electrical charge.